Anaheim Council’s $158-Million Hotel Subsidy Overturned

ByDecember 11, 2012 at 4:09 AM

An Orange County Superior Court judge Monday voided the $158-million room tax subsidy agreement to develop two four-star hotels in Anaheim's resort district, ruling that the City Council’s approval of the deal violated California's open meetings law.

A group of activists had sued after the deal was approved at a January City Council meeting, arguing, among other things, that the meeting agenda violated the law, known as the Ralph M. Brown Act, because it did not properly notify residents that the council would be approving an agreement.

The meeting agenda stated: “Discussion to consider an amendment to an existing economic assistance agreement and provide direction to staff to develop an agreement with the developer.”

Typically, staff is directed to develop an agreement, which then comes back for another council vote. But in this case the council had empowered staff to prepare and authorize the agreement without coming back to a public meeting, citing the urgency of the developer’s request to secure financing.

There were no public comments against the deal the night it was approved. Many outraged residents protested at City Hall after the council vote and complained that they weren’t informed about it.

“If the city is going to just give away $158 million and get nothing new in return, then at minimum it should have to tell the public about it in advance,” Eric Altman, executive director of the Orange County Communities Organized for Responsible Development Executive Director wrote in a new release. The organization and other activists filed the lawsuit.

Unless the city appeals, the judge's ruling means that the controversial subsidy must come back to the council for another vote. The previous 3-2 council vote — Mayor Tom Tait and Councilwoman Lorri Galloway voting against and council members Kris Murray, Harry Sidhu and Gail Eastman voting in favor of approving the deal — created a council rift that dominated city politics well into the campaign for November's election.

It’s unlikely that the election of two new council members — Lucille Kring and Jordan Brandman — will change the eventual outcome of the subsidy deal. Kring and Brandman will be replacing Lorri Galloway, who voted against the deal, and Harry Sidhu, who voted for it.

Kring has said that she would have negotiated for public benefits in exchange for the subsidy. Brandman has stated that he favors the subsidy.